Sell Smarter, Not Harder

The power of positioning

Article |
Thu, 03/10/2011 - 06:29

by: Neil Mahoney

By NEIL MAHONEY

Positioning was the word that was used in the 1980s, the Golden Age of Marketing, to describe the multi-step process marketers must use to develop what’s now called the “value proposition.” Whatever you call it, you can’t develop these sales and marketing tools without it:

elevator pitches and mission statements

ad campaigns and slogans

publicity, websites, newsletters, etc.

Positioning isn’t easy. It takes a lot of critical thought and analysis, but once you get it right everything else comes easy. The best positioning statements or value propositions begin with “The only. . .” and aren’t more than 25 words long.

Here’s how it’s done: First, identify your top two or three markets and prospects – the few that account for the bulk of your industry’s sales – and prioritize their wants and needs.

By limiting your list to the top prospects you’ll keep focused on the few users who can account for most of your sales. This not only helps optimize sales and marketing costs, it helps reduce design and manufacturing expenses because the company will stay focused on what’s really important to major prospects and not be distracted by details that don’t add to sales and profits.

Once you’ve determined the wants and needs of your top prospects, evaluate your ability to satisfy those wants and needs in relation to your competition. Next, prioritize these proven and demonstrable strengths to coincide with the wants and needs of your top markets and prospects. Then determine your major selling points (benefits, supported by features) based on this analysis.

ALWAYS REMEMBER: A highly important customer benefit in which you have lesser superiority over competition – but are still superior – will likely generate more sales than a benefit in which you dominate the competition, but is less important to your prospects. Also, make sure you use terminology that is clearly understandable to your prospects.

Not until you’ve done all this are you properly prepared to develop your positioning statement or value proposition. Another thing to remember: Your positioning statement or value proposition may change depending upon the type of prospect you’re trying to sell: EG: Managers may be better persuaded by return on investment (ROI) data, while Designers may be better persuaded by technical information.

The first attempt at the positioning of your product or service – and the resulting statement or value proposition – may not prove to be the best, as the following case histories show:

Is it a cleaner that disinfects or a disinfectant that cleans?

Several years ago a large, well-known manufacturer of consumer products developed the first household cleaner that could both clean and disinfect bathrooms, kitchens and other places around the home. They debated whether the product should be marketed as a “Cleaner that Disinfects” or a “Disinfectant that Cleans.” They chose the latter because the product’s ability to disinfect was their exclusive. Sales did fairly well, but the product didn’t take the market by storm.

Later, they analyzed the wants and needs of the market more carefully. They discovered that, while people wanted both features, they felt a cleaner was more important to the buyer than a disinfectant.

The company changed the product’s positioning from “a disinfectant that cleans” to “a cleaner that disinfects.” This simple but important change caused the market to really react – sales zoomed.

Bigger is better

When I became a magazine publisher, the first assignment I had was to turn around a digest-sized manufacturing management magazine, which had lost almost half its business in less than two years.

Because digest-sized magazines are smaller than the more widely desired full-sized magazines, they must have larger circulations in order to compete effectively for the advertisers’ business. The magazine I took over had that larger circulation, but had lost much of its business because it had changed editorial emphasis and lost its appeal to advertisers, who expect certain things from magazines with smaller formats.

I spent the first few months making calls with the sales force and we were beginning to make some headway – too little in my opinion, but management seemed fairly pleased. Flying back from a sales trip one day, it hit me!! Start thinking like the ad man and ad manager you used to be, I told myself.

Since the larger circulations and added market reach that digest-sized magazines offered were what offset the disadvantages of their smaller size, I reasoned, a full-sized magazine that had greater circulation – plus gave the advertisers two important market segments instead of one – ought to take the market by storm. I made the suggestion to my boss, the president of the division, and he went to his boss, the president of all ABC Publications. They liked the idea, but both were concerned that if my idea bombed, the magazine would go under.

Despite their concerns, we pulled it off. Less than 18 months after upsizing and raising our rates, we had doubled sales, and 80 percent of the added revenue went straight to the bottom line.

What does this have to do with positioning and value propositions? When we upsized the magazine and kept our larger circulation, here’s what we were able to tell our prospects:

We are the only magazine that thoroughly covers the two most important groups of heavy users and big spenders in the industry: large, high-volume manufacturers and the contract manufacturing businesses

The words “the only” in any value proposition gets your attention and puts you in a competitive position by yourself.